What is my salary after tax?
The Danish average income is 45,500 kroner per month (see below for a breakdown of variations according to age and sector). This is your basic salarywhich is the basic wage before supplements are added and before tax, which is paid monthly, monthly salary. The average full-time job is typically 160.33 hours per month, your number of hours. What you take home after deductions is called your nyet pay.
Broadly, your salary will include the following deductions: Labour market tax (AM contribution 8%), State tax (federal tax 12%), Municipality tax (council tax 25%), State pension contribution (ATP contribution 94.65 kroner), Holiday pay (Ferie money potentially 12.5 percent claimed back later in the year).
If you have an income of 45,500 kroner per month, that means around 45.1 percent will be taxed, and 94.65 will go towards the state pension, giving you a total of NOK 24,884.85 per month (3,340 euros per month) after deductions. Holiday pay may be deducted and later reimbursed, depending on your employer.
It should also be noted that various tax deductions can result in the overall tax contribution being reduced.
How does salary vary by age and profession?
The average employee in Denmark earns 45,545.60 kroner (6,111 euros) per month before taxes, according to Statistics Denmark.
The older you are and more experience you have, the more you earn. So when broken down into age categories, the figures are slightly different.
Under 20 year olds: 19,264.35 kroner per month.
20-24 year olds: 26,996.14 kroner per month
25-29 year olds: 36,120.13 kroner per month
30-34 year olds: 41,606.29 kroner per month
35-39 year olds: 45,287.62 kroner per mont
40-44 year olds: 48,227.51 kroner per month
45-49 year olds: 49,852.91 kroner per month
50-54 year olds: 49,817.97 kroner per month
55-59 year olds: 48,471.48 kroner per month
60 and over: 47,138.48 kroner per month
Job sectors also have an impact on salary. On the Statistics Denmark website, you can select your field of work to find the average salary for your role.
Here is a sample of various professions in Denmark and their average monthly salaries in 2021:
Software developers: DKK 59,904.51
Science and engineering professionals: 59,092.83 kroner
Architects, planners, surveyors and designers: 49,013.29 kroner
Accountants: 60,526.45 kroner
University and higher education teachers: 50,452.46 kroner
Secondary education teachers: 51,013.67 kroner
Primary school teachers: 45,427.32 kroner
Early childhood educators: 38,708.66 kroner
Medical doctors: 73,551.49 kroner
Physiotherapists: 39,998.38 kroner
Nursing and midwifery professionals: 44,130.79 kroner
Advertisers and PR managers 82,871.18 kroner.
Public relations professionals: 51,349.93 kroner
Advertising and marketing professionals: 51,768.53 kroner
Shop sales: DKK 27,894.29
Restaurant managers: DKK 44,294.49
Waiters and bartenders: 27,566.83 kroner
What comes out of your salary?
Income tax in Denmark is divided into a number of components. The most important are the two state taxes, basic and top tax (federal tax and top tax); municipal tax and labour market tax (AM contribution).
READ MORE: How does income tax in Denmark compare to the rest of the Nordics?
AM contribution
AM-bidrag or labor market contribution, literally ‘labour market contribution’ is a tax of 8 percent of your wages. It is paid directly to the Danish Tax Agency (Skat) by your employer (for those who are not self-employed or freelance).
Federal tax
State or basic tax (bregretted) comprises 12.10 percent of your income after tax deductible income has been subtracted.
Municipal tax
Municipal tax is the personal income tax which covers municipal services. The amount you pay depends on the municipality you live in but on average it is 24 percent.
Top tax
The top-end Danish income tax bracket, top tax, is based on the political principle that those who earn the most, must contribute more to the Danish state. Political debate on tax policy often revolves around the extent to which top tax should be applied.
Top tax is 15 percent (2022). This means that you have to pay 15 percent extra in tax if you earn more than 600,543 kroner. After AM-bidrag deduction, this is 552,500 kroner so you pay this extra 15 percent on the amount of money you earn over 552,500 kroner.
READ ALSO: How will new Danish government change income tax?
Church tax
Denmark has a small church tax (kirish tax). The exact rate depends on the municipality but averages at 0.661 percent. Only members of the Church of Denmark (Folkekirken) pay this tax, so foreigners who have moved to the country in adulthood (as well as people of other religions) generally won’t see it on their pay slips. Danes can opt out of paying the tax if you they do not wish to be a member of the church.
Sloping tax ceiling
There is a tax ceiling (sloping tax ceiling), which in 2022 was 52.07 percent. This means that you can never be taxed more than this amount. If your total tax rate ends up exceeding the tax ceiling, your top tax is reduced so that the total tax rate ends up at the maximum 52.07 percent.
Deduction
Literally ‘(tax) deduction’, deduction is the part of your income which can be exempted from taxation. This can be up to 46,000 kroner (DKK 37,300 for people under 18).
Things that can be exempt from tax include membership to trade unions and A-kasse, employment expenses, charitable contributions, child support maintenance and the cost of commuting. You can check what you are entitled to here (in Danish).
READ ALSO: Denmark raises tax deduction for commuters amid high fuel prices
ATP contribution
ATP stands for Labour Market Supplementary Pension. This is a pension into which you are legally obliged to pay and which supplements the state pension (public pension). Your employer pays two-thirds of the ATP contribution, one third comes from your wage. This is the amount you will see on your payslip.
If you are paid monthly it will be 94.65 kroner (2023). Your employer contributes 189.35 kroner, adding up to 284 kroner per month.
AM-Pension
Labor market pension and other pension contributions will be recorded on your payslip. You may see the terms AM-pension firma or AM pension owndepending on the type of pension you may pay into.
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Holiday pay
‘Holiday money’ or holiday pay is a monthly contribution paid out of your salary into a special fund, depending on how much you earn. You can claim back the money once per year, provided you actually take holiday from work. It is earned at the rate of 2.08 vacation days per month.
There are two sub-types of holiday pay. These are holiday with paywhereby you are paid while on holiday – in this case you are entitled to a supplement of about 1 percent to your wages.
If you are not paid while on holiday, you will receive holiday allowance as part of your wages and will see this on your payslip. This means that your employer is obliged by law to pay 12.5 percent of your wages in holiday money into the national pool for you to claim back each year, equivalent to five weeks’ holiday.
READ ALSO: EXPLAINED: How to understand your Danish payslip